McKenzie, Dennis J., and Betts, Richard M., Essentials of Real Estate Economics, Fourth Edition, Prentice-Hall, 1996. 470 pages. Current real estate literature has reached the stage where empirical estimates need to be interpreted within a coherent theoretical structure. Unfortunately, many practitioners lack theoretical backgrounds, especially in economic theory. Their experience and empirical knowledge would have greater impact in our literature if they would link it to traditional theory. The latest (completely rewritten) edition of Essentials of Real Estate Economics by Dennis J. McKenzie and Richard M. Betts will help them achieve this. It contains lucid descriptions of the comprehensive set of economic and financial theories most useful in real estate analysis, even to readers who are new to both subjects. It will therefore serve both as a basic text and reference book. The work is composed of four parts. The first two parts focus on the traditional urban theories. In the second half of the text, the authors present an economic view of real estate development and investment, subjects that generally appear only in finance and real estate texts. A primer on economic principles in presented on part one. The basic ideas in both micro and macroeconomics that students need to understand real estate applications are set forth. A sequence of chapters describes the Federal Reserve System and how the regulation of interest rates affects real estate markets. The unit concludes with a comparison between general theoretical and actual real estate markets. The general theory is extended to include this unique imperfect type of market. This first part is a great introduction to real estate for economists and provides a concise review of economics for those who were primarily trained in other disciplines. Part II develops the traditional urban subjects: community development, growth, and land use patterns. This unit is organized by the various types of land use: residential housing, commercial, industrial, rural, and recreational. The economic factors that determine values in each sector are carefully described. In addition, a range of topics from employment growth to transportation theory and spatial location is developed to explain urban growth. The effects of neighborhood preservation and governmental housing programs on metropolitan and suburban growth patterns are also considered. This second part is a concise, well-organized presentation of urban economics. It includes an appropriate balance of national, regional, and local neighborhood issues. …